"We believe the U.S. television industry is entering a period of prolonged structural decline, caused by a migration of viewers from ad-supported platforms to non-ad-supported, or less-ad-supported platforms," Todd Junger, the lead analyst on the report, wrote.

In other words, consumers are moving away from traditional TV and instead watching on-demand services like Netflix, Hulu, Amazon Prime, and even YouTube.

Consider this chart from the investment banking firm Pacific Crest Securities, showing the decline in total subscribers to pay TV companies over the last three years compared with the massive growth of Netflix, Amazon, and Hulu:

About 100 million households in the US still pay for TV, but that number isn't growing.

Pacific Crest Securities estimates that the top eight pay TV providers lost 463,000 subscribers in during the second quarter of this year compared with 141,000 during the same period last year. Traditional TV networks are feeling this pinch on two fronts, because they make money both from advertising as well as from fees that pay TV providers like Comcast and Time Warner Cable pay the networks to carry their channels.

Advertising is down — there are fewer viewers to reach and more places for companies to advertise than ever.

And to make matters worse, investors are worried that subscribers to pay TV will continue to decline — more people will cut the cord, and new households won't sign up for cable, as options for watching TV without a cable or satellite subscription improve and proliferate. That means that the fees networks get paid, once a steady stream of revenue for the industry, will decline.

"...we believe TV advertising is undeniably in secular decline [and] affiliate fees are now also being put at increased risk," Junger writes.